Prudent macroeconomic policies and a moderate, though rising, debt burden. An independent central bank committed to low inflation, well-developed capital markets, and a strong financial sector. Political stability and transparent institutions. Structural economic weaknesses and deep social inequalities, putting pressure on policy. Vulnerability to volatile capital inflows. The rating reflects South Africa's prudent macroeconomic policies, a moderate (albeit rising) debt burden, and stable political institutions. These are balanced by the country's continued high reliance on external portfolio inflows in the context of a significant current account deficit, and severe structural socioeconomic weaknesses. Against the background of economic recession, a large revenue shortfall has formed during 2009, which we anticipate will be the main factor leading to a much higher than
